July 16, 2010

It’s no surprise that a key to innovation is rejecting
conventional wisdom. And innovation thrives in many businesses, particularly
those in the technology space. But whether in silicon valley or silicon alley,
marketing is still largely done in the same way it has for decades. Companies
hire PR firms who push out press releases, while marketers post product info to
web sites and create factsheets for their sales staff.

Marketers may dabble with new approaches, sticking a toe
into the social media space by creating a Facebook fan page or setting up an
official Twitter account, but even then most apply old approaches to new
platforms. Knowledge is shared through boring white papers which sit behind a
registration wall while Twitter accounts push out links to bland press releases
or staid marketing messages.

It’s not the first time that David has written about the
Grateful Dead. Readers of his book World Wide Rave may recall a discussion
framed by asking whether you wanted to be like Led Zeppelin, whose historic
reunion show at the O2 arena was not made available in video format (and where YouTube was forced to remove clips posted by fans), or like
the Grateful Dead who, long before the days of Facebook and social media,
encouraged concert attendees to record their shows, even setting up special
sections where they could plug in to the soundboard to get better quality
recordings.

As the book pointed out:

If you want to remain relevant
in an always-on, fan-centric, YouTube world, you need to embrace—not restrict—your
most important supporters. You need to believe in the power of a World Wide
Rave to sell your products and services.

In this new book, David and Brian take a look back at how
the Dead worked to develop and nurture an active community of fans, then show
how to apply many of those same techniques to today’s marketing platforms. For
example:

Rethink traditional industry
assumptions – Rather than focus on record albums as a primary revenue source
(with touring to support album sales), the Dead created a business model focused
on touring.

(blogger note: if you’ve
read what Fred Wilson and others have written suggesting media companies look
to monetize the audience, not the content, this is a great example)

Bypass accepted
channels and go direct – The Grateful Dead created a mailing list in the
early 1970s where they announced tours to fans first. Later,they established
their own ticketing office, providing the most loyal fans with the best seats
in the house.

The foreword to the book is written by one of the biggest
(literally and figuratively) Deadheads, former UCLA and NBA great Bill Walton.
As he so eloquently describes it:

Their passion, creative spirit, imaginative soul, and industrious
commitment to promote truth, fairness, justice, and the Grateful Dead way led
them through the evolutionary transition where they went from playing for
silver to playing for life. This book tells you how to make that transition for
your own career.

March 04, 2009

For traders,
the idea that you can thoroughly investigate each rumor and determine which are
important and which are factual, all before the price moves, is
folly.So, traders
trade the rumor. In bull markets, that means they buy the rumor, then sell when
the news come out. In bear markets, they short the rumor, then close the
position on the news.

Yesterday,
this blog got into a bit of a kerfuffle when it reported on how web news outlets
and Twitter were covering the rumor that Blockbuster (NYSE: BBI) might be preparing to
file for Chapter 11 bankruptcy. That post noted that the story, which originated
on Bloomberg News, was quickly picked up via Twitter, while traditional web news
outlets such as Google and Yahoo trailed.

While my
blog post was focused on how the news spread through the web, it was picked up
by FT.com's Alphaville as part of a story noting how the rumor was incorrect. So, that
got me thinking about rumors and Twitter, and whether the 140 character limit
might cause rumors to be spread with less background
information.

140
characters is not a large canvas. Even for the artful editor, communicating a
topic in 140 characters can be a challenge. Yet one of the great things about
Twitter is its ability to include links, usually in about 20 characters thank to
Bit.ly or TinyURL. So, the user is typically left with 120 characters in which
to communicate their message, leaving room for a
link.

In looking
at the timeline, it seems that the Twitter element was not a big factor in the sell-off. In
essence, the story is that Bloomberg posted a story indicating potential adverse
news for Blockbuster and the markets quickly responded, tanking the stock. From
that standpoint, this is no different than thousands of other market events in
the past. There's a sign of possible trouble with the stock, traders trade on
that rumor, then the final news comes out.

I'd also
question whether the final news really dispelled the rumor. Blockbuster quickly
came out with a response, saying they were not filing for Chapter 11. But the
reality is that they've hired a law firm to help them deal with impending capital
challenges. The ultimate outcome of that may or may not be a bankruptcy filing,
but it's clear that the already distressed company is liquidity-challenged in a
very difficult credit environment and that they've hired Kirkland & Ellis, a
bankruptcy counsel.

Returning to
the premise of this post, though, is 140 characters appropriate for sharing
information? While it has its limitations, they're no more so than those of the
traditional media for spreading rumors - the telephone or the trading floor.
And, while I'd encourage tweets to include a link to supporting data, the goal
of the tweet is not to provide a detailed analysis of the situation but rather
to give a quick alert that something is happening. Could Twitter be a tool that
people could use to knowingly spread false rumors? Certainly. And that creates
opportunities for sites like StockTwits and others, to define ways in which
participants earn trust from the community.

December 07, 2008

While marketers flounder about looking for a business model for the use of Twitter, I've seen some recent viral examples where Twitter was used for the common good. In both of these instances the network effect of Twitter made a huge impact.

The first example was the use of Twitter to help identify a potential kidney donor for Marielle, a teenager with failing kidneys, in search of a living donor. Her mother posted a plea to her blog, letting people know of the challenges she was having in getting potential donors tested. That blog post led to a tweet by @chrisbrogan which was later retweeted by many, including Laura Fitton (aka @pistachio). I first learned of Marielle's situation through the @pistachio tweet. Clicking through, I found a form to apply to be a living donor. I filled out the form and submitted it to NY Presbyterian and also retweeted the original message to my network.

The next day I received a call from NY Presbyterian confirming they'd received my application but that they'd received so many requests "from the Internet" that they would get back to me if needed.

The second instance is a great charitable fundraising effort started by Amanda Mooney, a Chicago-based social media maven at Edelman PR. About 6 weeks ago, Amanda began to ask her Twitter followers to give up their Friday cappucino and instead donate $5 to a worth cause. She asked her followers to propose potential causes and chose one each week. My pet cause - Donors Choose - was selected the second week and we quickly raised enough funds to buy two Flip digital video cams for a classroom project. Fast-forward a few weeks and the effort has really taken off. This week's goal was to raise $1,000 for the Staley Foundation, which provides support services for cancer survivors. The Staley Foundation was created by Alicia Staley, herself a three-time cancer survivor, whose website tagline is "Kick ass cancer survivor... need I say more?"

@AmandaMooney posted the first tweet a bit early on Thursday night and I was honored to be the first one to donate. By Friday morning, we'd surpassed the $1,000 goal and @stales quickly doubled the target. The $2,000 target was surpassed that evening and by the end of the weekend, we'd surpassed more than $3,400.

So, why is Twitter so important in this process?What makes Twitter so critical is the network effect. Sure, we could start a weekly email list where those who opt-in could get a weekly request to make a donation. But it could only grow as quickly as the list grew. Instead, @amandamooney posts a tweet each week, which is then picked up and retweeted by some of her 2,000+ followers, then subsequently retweeted by many of those users' followers and so forth. So, a simple tweet (and subsequent retweets) may easily be read by tens of thousands of people, more than would ever see an email list.

Twitter is beginning to move towards mainstream adoption. With that comes risks that spammers and marketers will muck up a system that's just starting to take shape. Of course, with Twitter, you can't spam someone unless they follow you, so I'm hopeful that the Twitter environment will remain clean for a bit longer so that viral activities like the ones described here may continue to flourish.

Have you used Twitter for the common good? Post stories in the comments please.

November 10, 2008

What brands do you think of when you think about political polls? For most people, the names Gallup, Mason-Dixon, Rasmussen, Pew and ,perhaps, Zogby come to mind. Smart analysts and political junkies are quickly adding the name Silver to that list.

Nate Silver is the founder of FiveThirtyEight.com, a website that aggregates poll results and presents a consolidated view to users. But 538 goes beyond simple aggregation. The site analyzes the past results of each of the pollsters and scores them according to their bias. Every poll will have a bias - what Silver refers to as Pollster-Introduced Error (or PIE). PIE focuses on the errors introduced by the methodology of the pollster, as opposed to those purely a result of the statistical sample size. Some lean a bit left and others a bit right. One key to understanding differences in poll results is to understand the bias of each of the polls.

In developing their aggregated forecast, Five Thirty Eight assigns each poll a weighting based upon the pollster's historical track record, the sample size of the poll and the recency of the poll. They apply other statistical techniques to reduce the impact of outliers and refreshes polls that may be dated. Then, using all of this analysis, they run 10,000 simulations to provide a probabilistic assessment of electoral outcomes.

So, how well does all that number crunching work? In the presidential race, Five Thirty Eight's final pre-election day projection was that Barack Obama would win 52.3% of the popular vote, while John McCain would take 46.2%. The final tally: Obama 52.6%, McCain 46.1%. The only state that 538 called incorrectly was Indiana, where they projected McCain to win a highly competitive race; Obama, in the end, won Indiana by nine-tenths of a percent (49.9 to 49.0%).

Where does Nate Silver get his insights into political polling? Is he a Gallup veteran? Has he been toiling behind the scenes at Congressional Quarterly? Hardly. Prior to launching FiveThirtyEight.com, Silver was a writer and analyst at Baseball Prospectus.com, which does similar statistical analysis to project likely statistics for baseball players. In other words, he's just a stats geek.

There are other poll aggregators on the web, such as pollster.com and realclearpolitics.com. But while each does a good job, over the past few months as I closely followed the presidential election as well as various Senate and House races, I found myself turning to FiveThirtyEight for trustworthy data and analysis. And I wasn't the only one. As we moved into November, FiveThirtyEight was among the top 2,000 visited sites according to Alexa. In addition to great data, FiveThirtyEight prides itself on its transparency and provides a detailed breakdown of the six-step process that serves as the basis of their methodology.

As content becomes commoditized, its increasingly difficult for aggregators to differentiate their offering. Nate Silver and FiveThirtyEight.com are a great example of how to add significant value to commodity data through analytics and a great user interface. FiveThirtyEight also exemplifies how new media builds on the efforts of the traditional media. The underlying data for their analyses comes from those traditional pollsters mentioned in the opening paragraph of this post.

As we move on from the 2008 elections it will be interesting to see what five thirty eight does to keep their site relevant. Or, perhaps Nate (and his colleague Sean) will move on to another venue. Perhaps they'll shift their statistical models to looking at the financial markets or into determining the potential future movement of energy costs. But in the meantime, 538 is not yet done with 2008. They are still analyzing the results of contested Senate races in Alaska, Minnesota and Georgia and have already begun to handicap the races for the 2010 open Senate seats.

October 20, 2008

Tired of watching the market plunge every day at 3:55pm? Concerned that money market funds might break the buck? Nervous from watching the hedge fund managers in Greenwich out seeking a new line of work? So, what other investment options are out there? How about... models?

Taking a cue from reality series like America's Next Top Model and Project Runway, a new website, Beauty Holding, offers the opportunity for anyone to invest in the future earnings potential of fashion models. Beauty Holding combines elements of social media, reality shows, fantasy sports teams and investment into a single site. Users invest funds to "sponsor" the model of their choice. Once a model receives $10k in sponsorship, her career is "launched" with the creation of a professional portfolio and introduction to various modeling agencies. Sponsors receive a 50% share of the model's first year net earnings.

So, is this a path to easy money? According to Beauty Holdings, an actively working professional model makes at least $50-100k per year with successful models exceeding $250k.

According to Beauty Holdings' Ingrid Devatova (herself a former model and director of a modeling agency), the website generates revenues in three ways:1. Model booking fees and agency commissions2. Internet advertising3. Interest earned from sponsor float balances

The site recently launched and already has two models with sponsorship levels in the $3k range. They expect their first model to achieve the level of "golden beauty" ($10k in sponsorships) within the next few months and project 7-10 additional "golden beauties" in the following year.

So, is Beauty Holding a good investment? Well, I'm a bit of a skeptic. It seems to me that if I sponsor someone's launch into the business, I'd like to see some residual earnings beyond their first year. If I'm an angel investor in a business, I wouldn't settle for a piece of the first year's revenues.

That being said, I'd much rather admire the images of this portfolio than be staring at a depressed Jim Cramer at the closing bell.

August 20, 2008

I’ve been asked to serve as moderator of the Financial Blogging panel at BlogWorld, to be held September 20-21 in Las Vegas.

We’ve got a great panel planned. The panel, entitled “How Financial Blogs Influence the Markets” features four compelling panelists:

• Paul Kedrosky, author of the Infectious Greed blog and frequent CNBC guest. Paul is also a senior fellow at the Kauffman Foundation and a strategist with southern California quant firm Ten Asset Management.• Howard Lindzon, founder of vlog WallStrip (acquired by CBS) and author of the Howard Lindzon blog. Those who’ve seen Howard’s television appearances or follow his tweets @howardlindzon know that he’s funny and provocative. Much like possible VP candidate Joe Biden, when Howard opens his mouth you have no idea what he might say.• Felix Salmon, author of the Market Movers blog on Conde Nast Portfolio.com. Felix has the eye of a skeptic and often points out gaps in premises taken as fact by others. His days working for Nouriel Roubini keep him from seeing the rosy side of things. He’s been a leader in discussions of blogonomics and, of course, maintains the (sort of) weekly Ben Stein Watch, where he notes the often ludicrous statements made by comic actor cum financial writer Ben Stein.• Jim Ledbetter, editor of The Big Money, a new financial website to be launched by Slate.com. Jim, a veteran financial writer, formerly served as deputy managing editor of CNNMoney and previously was a senior editor at Time and editor-in-chief of The Industry Standard Europe.

The panel brings together a mix of practitioners and financial journalists, independent bloggers and media-owned properties, all bringing unique perspectives to the discussion. And, the panel is geographically diverse with two Canadians (Paul and Howard) and a Brit (Felix).

Blog World should be a fun event. Other speakers include Steve Rubel, Chris Brogan, Robert Scoble, Doc Searls, Jane Hamsher, Zappos CEO Tony Hseih and dozens of others. If you’re not already registered for BlogWorld, here’s the Blog World registration page.

Financial blogging is one of the more interesting segments of the blogging space. Despite the huge financial news presence of companies like Bloomberg, Dow Jones, Reuters and various newspapers, blogs frequently are ahead of the mainstream media in grasping the significance of key trends. Alacra’s own Research Recap was writing posts about the emerging subprime crisis months before the Wall Street Journal picked it up. During the panel, we’ll discuss why that’s the case. Other topics I plan to cover include blogonomics, the impact of microblogs like Twitter and whether blogs are rapidly becoming the new form of trade publication.

What questions would you like to see the panel discuss? Post your ideas in the comments or send me a tweet @graubart.

July 21, 2008

Covestor launched last year as an investor platform that tracked real portfolios and actual trades, allowing individual investors and investment advisers to build a documented track record. Recently, Covestor opened up its platforms - until then, you could only view others' portfolios by entering your own trades. Now, anyone can sign up and get investment ideas from others.

I recently had the chance to catch up with Covestor co-founder Simon Veingard.

Content Matters: Tell me a little bit about CovestorSimon Veingard: Covestor.com aims to de-institutionalize money management. We provide a real-trade sharing service that offers self-directed investors the opportunity to compete with, and be rewarded like professionals. By sharing the work they already do for themselves Covestor enables them to build their reputations, and eventually earn fees based on proof of their investment record.We are the only service to share what real people are really investing in, not stock picks, commentary or fantasy investing, and is the only service that will allow member’s to benefit financially for the hard work they are already doing.

CM: Where did the idea for Covestor come from?SV: One of my co-founders has a cousin who lives in Venezuela and works for a local oil company. His hobby is to invest his own money in stocks and shares in his spare time, covering about 20 local oil stocks, and he is pretty good at it. Whenever he would tell us what he is doing we would all love to copy him but actually we would love to be able to give him $50,000 and say to him ‘whenever you do something with your own money, do it with ours and we will happily compensate you for it’. Given the increasingly level playing field between so called ‘professionals’ and private investors – the same access to information, markets and transaction costs – we therefore wanted to enable people to invest alongside brilliant individuals rather than in expensive funds.

CM: My first boss told me that the secret to financial success was to find a money manager you believe in and invest with them. At the time (in 1985), half our company pension fund was invested in Berkshire Hathaway stock and we did quite well. How does Covestor help people find the next Warren Buffett?SV: You’re absolutely right – investing is all about great people who’s investment strategy you buy into. So with the levelling of the playing field, why shouldn’t individuals compete with professionals for fees. If you take a look at the Covestor Rankings you’ll see the investment talent on Covestor already doing the hard work for themselves and delivering great results.

CM: For some, the idea of sharing their investment results could be scary. What have you seen as the driving reasons why someone might share their results openly?SV: Our members have told us that they share their investment activity on Covestor mostly for the following reasons:

to build a verified track record and develop a reputation which provides real credibility both on Covestor and elsewhere on the web

to keep better track of their portfolio as Covestor provides professional grade tools to measure performance that they can’t get with their broker.

to enforce investment discipline as their trading activity is being followed by others.

to eventually earn fees.

CM: Tell me about the community aspects of Covestor.SV: Fundamentally, investing is a social activity – people like to share ideas and interact. Covestor has a number of community features to facilitate this interaction and build relationships and credibility of our members, including:

allowing members to coat-tail like minded investors – members can track others trading activity and receive notifications of their trades live.

direct access to investors – not possible with professional fund managers – investors provide rationales for their positions and interaction is encouraged with blog and ‘ask me a question’ features.

ability for investors to export their investment credibility anywhere else on the web with Covestor Widgets enabling them to prove they’re really doing what say they are.

CM: You can never time the market, but it’s not been the greatest year to launch an investment-related application. How is the credit crunch and bear market impacting your growth?SV: Volatility is the best time for Covestor. In both bull and bear markets investors want to know what how they should best manage their investments and ultimately with lots of big funds losing money, it’s a good time to be looking for better alternatives and Covestor is a great place to find great people who are consistently performing. And accessing all this talent is free.

CM: When you first launched, in order to monitor others, you had to share results from your own trades. Last month, you opened the system up so that anyone could track others, whether or not they shared their own trades. Was that always the plan or did something steer you to do that? What’s been the response/reaction?SV: You are absolutely right, when we launched we intentionally set an incredibly high hurdle for membership in order to recruit smart and serious investors who were prepared to share their real trading activity publicly on the site. When we had generated sufficient liquidity with thousands of self directed investors building verified track records our plan was to open up Covestor membership to enable others to sign up and benefit from this expertise and allow the investors to build a greater following.Since opening up and allowing anyone to join we’ve had a fantastic response, surpassing our expectations. Our members’ investment performance speaks volumes and so it’s perhaps unsurprising they have attracted a following from so many new members.

CM: I’ve seen that a handful of professional investors have been using Covestor as part of a social media marketing strategy. Long-term, do you want Covestor to become the platform for professionals to demonstrate their track records? Do you think that it’s important to differentiate professionals from amateurs on Covestor?We are completely agnostic to the background of our members. We’d actively invite professionals to join but we think self-directed investors are the real heroes out there doing all the hard work for themselves and we are providing them the platform to showcase their investment prowess and ultimately compete with the professionals for fees.

CM: In professional asset management markets, many individuals will initially launch multiple portfolios, then close those that underperform, leaving a track record only for the top performers. Are there aspects of Covestor that limit the ability for someone to erase the tracks of bad results?SV: Yes, we do not allow users to tamper with their investment record and there is no selective reporting. All trading activity is verified.

CM: What’s coming next for Covestor?SV: We are building an asset management business that happens to recruit its investment talent via the web rather than head hunters. We will shortly be launching the capability for members to continue to share their trades for free or to earn fees. If they choose to get paid anyone following them will have to follow their investments with money, i.e. to fund a managed broker account which will track the trades of the lead investor. The lead investor will be compensated for the information they are sharing and Covestor will take a management fee.

July 11, 2008

Congratulations to Rafat, Staci and the PaidContent team.Kara at All Things D is reporting that UK-based Guardian Media Group has purchased the Content Next, parent of PaidContent for "north of $30 million".PaidContent recently celebrated their fifth anniversary and has been a case study in how to develop a professional media blog, growing the business with multiple sites and adding events. This reinforces what I've said previously about blogonomics. Expect more deals to come in the next 6-12 months, especially with the cheap dollar.

July 08, 2008

Career planning remains an underserved market. There was a land rush in the career management space about ten years ago, but all the players seemed to focus on the classified side of the business. So, Monster, Hotjobs, Dice and others all have taught a new generation of job seekers that the way to plan your career is to blast thousands of emails for jobs you may or may not be qualified for, hoping you'll get lucky.

When I was with Kaplan, they launched a joint venture, BrassRing, which originally sought to help job seekers manage their career paths, but failed to deliver on the plan.

One new site, Path 101, is taking a different approach, focusing on helping people manage their careers. Path 101 has just gone into (open) alpha and has a few interesting features. There's a personality test that aligns your personality style with appropriate jobs. One interesting feature is their resume genome - they have compiled several million resumes and are using that to map out what careers are actually like.

While it's early for the site (did I mention it's an alpha version?) there are a handful of useful tools up there and the promise of much more to come. The team has bravely posted its product roadmap, which I expect will change a few times before they officially launch, but it gives you an idea of their direction. Path 101 promises new social media tools in addition to the forums and resume genome are forthcoming, including the ability to compare your personality to your Facebook friends.

The Path 101 team is led by Charlie O'Donnell, better known as @ceonyc and the author of the This is Going to be Big blog. Charlie, an avid cyclist and Met fan, is one of the strong young tech leaders in NYC and previously worked as an analyst for Union Square Ventures (disclaimer: Fred Wilson is an Alacra board member). I anticipate good things to come from Path 101. Go check them out.

July 02, 2008

TechCrunch interviewed Powerset founder Barney Pell and Microsoft Live Search GM Ramez Naam yesterday, following the formal announcement of the acquisition. After a half-dozen or so questions about whether and when the deal would be formalized, Arrington dug in to the specifics of what the acquisition might do for Microsoft (NASD:MSFT) in their efforts to become competitive in the search market.

The key takeaway - according to Ramaz Naam, is that roughly 5% of searches now done on the Internet could be aided by the application of natural language processing. Considering that Microsoft has roughly 9% market share of the Internet search market, that means that roughly 0.45% of searches will get better results with Powerset.

Now, one could argue (and they do) that by returning superior results, users will move to Powerset/Live Search and their market share will grow. But, to make that happen, they need to show that they deliver radically better search results most of the time. You can't displace what's become a verb (Google) by offering a little better results once in a while.

I think that semantic search will, one day, play a role in improving search results. But my experience with semantic processing at ClearForest and in watching technologies such as Powerset and Hakia suggests that we are years away from seeing it deployed on a mainstream basis. So the fact that Microsoft has added a team of 50+ developers, focused on semantic search, to their Live Search team is a good thing. I just don't see it having any significant impact on Microsoft's ability to become a player in web search in the next three-to-five years.